Personal Finance Budgeting

Personal finance is a huge topic. It’s impossible to explain it in one page, even though I trim it to the limit. Let us, however, discuss one of its simple element, personal finance budgeting. This, too, is a huge topic and some people may say it cannot be explained in one page. But I am here to do it, to explain you how it can be done quickly, in five simple steps.

1. Do a Thorough Analysis
To start with, write down your monthly expenditure and income on a sheet of paper. That’s it. You don’t have to make any categories or divide your money into envelopes. But make sure you list down all the sources of your income, whether it’s a birthday check, a paycheck, gift, money, or additional income. Similarly, list down how much and where you spend your money every month. If you wish to have a simple, yet accurate budgeting tool, don’t miss out on anything.

2. Make Categories
Okay, now is the time to decide categories of your expenses and income. It would be quite simple in case of income, as it has limited sources. However, to break down your expenses into categories like utilities, investment, grocery, savings, and so on, wouldn’t be a simple process. Some expenses wouldn’t fit into any category. Don’t fret, make a separate category called ‘miscellaneous’. C’mon, it’s your budget, have it your way.

3. Setting Realistic Goals
Think about what you want to achieve and have it written on a journal. Writing it down and revising it over and over again is a healthy way to get motivated toward your goal. Besides, written goal is more concrete and clearer than a vague though in your mind.

However, most often, starters set an unrealistic goal, which is quite difficult to achieve. And when they fail, they starting hating the idea of personal finance budgeting. Set a simple goal initially. Achieving it successfully will give you the required boost in your confidence.

4. Have a clear path
Setting a goal is easy. Reaching it, however, is very complicated if you don’t know the right path. In this case, you don’t have to bother about right or wrong path, having a path way or strategy to achieve your goal is important. Say, for instance your short-term goal is to save $200 at the end of this month, think of how you would achieve it. Some prefer cutting down expenses. Some create additional sources of income.

If it’s getting difficult to save money at the end of each month, here is a simpler way. Get the money deducted automatically from your paycheck and ask the bank to put it in your savings account directly.

5. Implementation and Persistence
Remember, giving up it is an easy option than implementing it and following it continually. However, if you do it, you will get remarkable rewards. Only getting started is bit complex. Once, you overcome it, it would be a routine.

If you want to have a happy life and don’t want to face any financial difficulties, there is no other way better than personal finance budgeting.